Don't beat yourself up about this - medical issues can definitely make it hard to stay on top of everything! The good news is that while you'll owe some penalty, it's really not that bad in your case. For a $127 excess contribution, you're looking at about $7.62 per year in excise tax (6% of $127). So for 2020-2023, that's roughly $30 total - definitely manageable. Here's what I'd recommend: First, call your HSA administrator and request removal of the excess contribution from 2020. They should be able to calculate any earnings on that $127 and remove both the excess and earnings. You'll get a 1099-SA for 2024 showing the withdrawal. Then file Form 5329 for each year 2020-2023 to pay the 6% excise tax. You don't need to amend your full returns - just file the 5329 forms separately with payment. The earnings portion will be taxable income on your 2024 return, but since it's been sitting there for years, it might actually be a decent amount that's been growing tax-free. One tip: when you call your HSA administrator, be very specific that you want to "remove excess contributions for tax year 2020" - use those exact words. Some customer service reps get confused if you just say you want to withdraw money.

I went through something very similar last year! Had an excess HSA contribution from 2019 that I didn't catch until 2023. The key thing to remember is that you're not in any serious trouble - this happens more often than you'd think, especially during job transitions. Here's what worked for me: I called my HSA provider (mine was with HSA Bank) and specifically asked for "removal of excess contribution for tax year 2020." They knew exactly what I was talking about and handled it within about a week. They removed both the $127 excess and any earnings attributed to it. The 6% excise tax isn't too painful on such a small amount - you're looking at about $7.62 per year, so maybe $30-35 total for all the years it's been sitting there. I filed Form 5329 for each affected year separately (didn't need to amend full returns) and just sent payment with each form. The earnings that get removed will show up as income on your 2024 return, but honestly after sitting in the HSA for 4+ years, there might be a nice little growth there that partially offsets the penalties. Don't stress too much about this - you're being proactive now and that's what matters. The IRS deals with HSA issues all the time and as long as you're making the effort to fix it, they're pretty reasonable about these situations.

I can totally relate to this confusion! I went through something very similar with my consulting LLC in Nevada about 6 months ago. The key thing I learned is that filing Articles of Dissolution with the state is only half the battle - you absolutely need to notify the IRS separately since they operate completely independently from state agencies. That letter you received is definitely the IRS way of saying "we still think you're active" despite your state filing. Here's what worked for me: 1. **Called the IRS Business & Specialty Tax Line at 800-829-4933** - They confirmed I had an EIN and that my LLC was still active in their system even though I'd filed state dissolution papers months earlier. 2. **Filed a final Schedule C** - Even though my LLC never made money, I still needed to file a final Schedule C with my personal tax return and check the "final return" box. This officially tells the IRS to stop expecting future filings. 3. **Sent a written notice** - Mailed a letter to the IRS at my normal filing address stating I permanently ceased operations, including my business name, EIN, and dissolution date. The IRS agent was actually really helpful and explained that this is one of the most common oversights small business owners make. Don't stress about it - it's totally fixable! Just tackle these steps now and you'll avoid years of confusing penalty notices. Better to handle it proactively than wait for more letters.

I'm actually going through this exact same situation right now and this thread has been incredibly helpful! I had my LLC in Florida and thought I was all set after filing dissolution paperwork with the state last year, but then I got a similar letter from the IRS a few weeks ago. Reading through everyone's experiences here, I realize I made the same mistake of assuming state and federal closure were connected somehow. It's honestly a bit of a relief to see how common this oversight is - I was feeling pretty foolish about not knowing I needed to handle the IRS separately. Based on all the great advice in this thread, I'm planning to call that IRS Business line (800-829-4933) this week to check my EIN status and figure out what final return I need to file. My LLC never made any money either, but it sounds like filing that final return with the "final return" box checked is crucial for officially closing things out with the IRS. Thanks for starting this discussion - you've probably saved a bunch of us from years of confusing penalty notices! It's amazing how this one thread has turned into such a comprehensive guide for properly closing an LLC.

Has anyone used TurboTax for calculating depreciation recapture and capital gains on a high-value property like this? I'm worried it might miss something with these complex calculations.

One important detail that hasn't been fully addressed - make sure you understand how the timing of your sale affects your tax situation. Since you mentioned your tenants are leaving soon and you're considering moving back in, the actual date of sale versus when you establish primary residency again can make a significant difference. Also, don't forget to factor in potential state capital gains taxes on top of the federal calculations everyone has been discussing. Some states have no capital gains tax, while others can add substantial additional tax burden on a gain this large. Given the complexity and the substantial dollar amounts involved ($146K+ in potential federal taxes), I'd strongly recommend getting a consultation with a CPA who specializes in real estate transactions before making any final decisions about timing the sale or moving back in. The cost of professional advice will be a tiny fraction of the potential tax savings you could achieve with proper planning. Have you considered a 1031 exchange if you're planning to buy another investment property? That could defer all the capital gains taxes, though it wouldn't help with the depreciation recapture portion.

Wait, I thought you couldn't change from MFJ to MFS after filing? My accountant told me once you file jointly, you're locked in for that tax year???

I went through this exact situation two years ago and want to share some practical tips that might help. First, definitely run the numbers on both scenarios before deciding - I used a spreadsheet to calculate my total tax liability under both MFJ and MFS, then compared that to my projected student loan payment savings. One thing that caught me off guard was timing the payments. Since you already received your joint refund, you'll likely owe additional tax when filing separately (especially your husband if he had less withholding). Make sure you have enough cash on hand to pay any balance due by April 15th, or you'll face penalties and interest. Also, keep detailed records of how you split everything - income, deductions, the refund amount, etc. The IRS may ask questions later, and having clear documentation saved me a lot of headaches when they requested additional info about our amendment. The paper filing requirement for 1040X is annoying, but send both returns via certified mail so you have proof they were received. It took about 4 months to get confirmation our amendments were processed, so be patient. The student loan payment reduction made it all worthwhile though!

I'm sorry for the loss of your mom and the added stress of taking over the family business finances during such a difficult time. As others have mentioned, requesting bank statements alongside your P&L is actually standard practice for CPAs - it's their way of doing due diligence to verify that income and expenses in your books match actual transactions. However, the bigger concern here seems to be the overall relationship and communication style. A good CPA should be explaining why they need these documents and working WITH you rather than against you. The fact that they're being inflexible about legitimate business deductions and pushing their own bookkeeping services while being dismissive of your work is problematic. Given that this resulted in late filing last year and you're experiencing the same issues again, it might be worth getting a consultation with 1-2 other CPAs to compare approaches. Many will do a brief consultation to review your situation and explain their process. You deserve to work with someone who respects the work you've done to get the business back on track and communicates clearly about what's needed and why. The documentation requirements won't change with a different CPA, but the experience of working with them certainly can improve significantly.

I'm really sorry about the loss of your mom and having to navigate all this during such a difficult time. Taking over family business finances is overwhelming enough without feeling like your CPA is working against you. What you're experiencing with the bank statement requests is actually completely normal - CPAs are legally required to verify the information they're filing, and bank statements serve as that third-party proof that your P&L numbers are accurate. It's not about not trusting your work, it's about professional liability and audit protection. That said, the way your CPA is handling this sounds problematic. A good CPA should be explaining WHY they need these documents instead of just demanding them. And the fact that they're being inflexible about legitimate business deductions while also pushing their own bookkeeping services feels like a red flag to me. My suggestion would be to get consultations with 2-3 other CPAs in your area. Most will give you a brief meeting to discuss your situation and explain their process. The documentation requirements will be similar everywhere, but you should be able to find someone who communicates better and works collaboratively with you rather than making you feel like you're being interrogated. You've done incredible work getting the business organized after such a loss - you deserve to work with a professional who recognizes that effort and supports you through the process.